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Abstract

The article deals with understanding the phenomena of employee rationalisation in firms especially the ones operating in dynamic environments. In this paper the authors do an extensive review of literature to understand the complete cycle, which is from environmental conditions leading to employee surplus consequently leading to firm implementing relevant strategies to deal with the situation and the consequences thereof on firm and individuals. The authors focus their attention on high technology firms and the relevant strategies for managing employee surplus in such firms. They extend the literature by proposing the relevance of tacit knowledge in situations where employee surplus needs to be managed and how it can be retained for preserving the competitiveness of firms.

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Review Of Literature

In this paper, an attempt has been made to explore the reasons for employee surplus, strategies to handle rationalisation and impact of rationalisation exercise. Academic literature from credible sources in the field of human relations management, strategy, sociology and psychology, were extensively reviewed, and significant attributes were collated. These collated attributes of literature was subjected to brainstorming with peers and experts in the field of strategy resulting in distilling of these studies under the broad heading of reasons for employee surplus, rationalisation strategies and consequent impact on individuals and firms. The brainstorming discussion served as a validation of the review done and resulting distillation of studies under the said headings.

In order to understand the importance and implication of management of surplus employees, it is imperative to understand the contexts in which firms need to shed surplus employees. Active management of human resources is a hallmark of a vigilant organisation that is tuned to its exogenous environment and is ever changing in order to remain sustainable. We explore the literature on environmental change to find out what compels an organisation to rationalise its human capital.